Monday, December 26, 2011

Apple in the last decade has transformed the computing world into the world of 'i': iMac, iPod, iTunes, iPhone, iPad, iCloud, iOS. In this world of computing, 'i' stands for the individual.

Every 'i' product is designed for the single individual. Apple never concentrated on the enterprise, it has a laser sharp focus on the individual, which leads to the next apple product : - iTV

iTV is an individualized TV experience which has 3 main charateristics - all sorrounding the 'i'

1. Internet based content delivery - through 'iTunes. (Wi-Fi or LTE)

2. Individuals can rent/buy viewing rights for the program

3. Individuals can watch any program any time, anywhere at their conveinece.

4. iCloud stores all the videos.

5. Individuals can watch the video programs on the 'i' products: iTV, iMAC, iPad, iPhone, iPod or a PC.

Trends driving iTV

Today TV has become tailored for the "Individual". Families no longer watch TV together, instead each member of the household watch at their convenience. This is the biggest factor driving towards individual entertainment.

Wasted Content - 80% of content gets wasted, losses in current distribution is causing increasing cost of cable TV. With iTV, cost per user will go down & bring Internet ecomonies to to TV/Video/Movie.

iCloud is a very effeceient way to store videos. Since multiple users will have the same video, iCloud will store one copy and provide links/privileges to all those who have bought the program.

Cable TV has failed to innovate. Cable TV was the creator for Video-on-Demand and the technology was created in 1990's, since then, cable TV companies have not innovated on it and have slacked off. Cable TV companies had good broadband serivces as well - but failed to create a killer IPTV offering. The current opportunity for Apple is actually a missed opportunity by cable TV companies.

Arguments for iTV

1. Why watch the program when the broadcasters puts it. I want to watch it at my convenience and on device of my choice.

2. Why watch new movies only in theater. I want to watch it at my place.

3. I will pay for what I use, and not for the unnecessary bundle of programs

4. Internet will allow the content producer to link directly to the viewer by automatic distribution.

5. The current distribution channels are ineffecient and wasteful. CableTV, Satilitte TV charge too much and are too restricitive.

Major players in the Internet TV era

Internet TV will create new winners. Leaders of cableTV era - Comcast, DishTV, SkyTV etc will have to dramatically change their business models, develop new technologies to compete and survive. My guess is that most of the cableTV companies will die.

Internet TV calls for strong cloud computing capabilities - to deliver videos on demand over high speed Internet. The companies will also need strong relationship with content produces. In view of the two core requirements: Cloud Computing & Access to Content, the clear favorites in the Internet TV era are:

1. Apple

2. Amazon

3. Google/YouTube

Big winners

iTV is focused on the 'individual', therefore users will be the ultimate winners. Internet provide the most effecient distribution system for content producers to reach the consumers. Distribution of video content will no longer be held hostage to TV channels and cable TV companies.

The new content distribution technology will win big. Apple, Amazon & Google are currently position to take full advantage of this shift.

Finally, the other hidden winners will be the Internet service providers and the network/storage equipment makers (Cisco, EMC, Juniper NetApp, Dell, HP etc)

In short the winners are:

1. Individuals

2. Content producers

3. Internet based distributors - Apple, Amazon, Google

4. Network providers - ISP, and Network equipment providers

Death of TV Channels

The term TV Channel - a streaming signal that broadcasts video programs is dead. The new paradigm is programs. People do not watch a channel, people want to watch programs. In the iTV era, people can watch programs of their choice, when they want it, where they want it, and on device of their choice. This leads to an explosion of programs that will be available for viewers on demand. Millions of programs will available in all languages - all on demand.

TV channels of today are like music CD's - each channel has 1or 2 good programs and the rest is filled with junks or re-runs.

Today a basic version of such a iTV system exists with YouTube. But YouTube suffers from several disadvantages:

1. Lack of clear cut organization of content.

2. No uniform quality of content.

3. Too much amature videos etc.

4. Lack of parental controls.

5. Spam content - where the title does not match with the content.

So if Google can get its act together and streamline its video content, it can become a major player in this market.

Biggest Losers

With the death of TC channels, CableTV, SatelliteTV service providers will have a tough time. Television set manufactures will adapt to develop Internet ready Televisions, those manufacturers who refuse to introduce Internet ready TV's will be a Dodo.

iTV creates New opportunities.

Internet will create new markets for creative, Niche content developers. We will see a wave of new content providers. The current distribution system makes it impossible for small and niche content developers to reach out to a wide audience, with iTV can provide.

Closing Thoughts

Apple's iTunes/iTV can change things be organizing video content better and ensuring quality of video programs. By having an Apple's seal of approval, users will be more comfortable with iTunes/iTV - than that of YouTube.

1 comment:

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